Funds circle Vodafone towers firm for potential $16bn deal
Infrastructure funds are circling Vodafone’s spun-off mast firm Vantage Towers but the telecoms giant is eyeing up a merger with one of the industry’s other major mast firms, according to reports today.
A number of bidders have launched unsolicited bids in recent weeks including investment firms Brookfield and Global Infrastructure Partners (GIP), valuing Vantage Towers at a premium to its current valuation of 15 billion euros ($16.57 billion), a source told Reuters.
The sources said that the offers are for a majority stake in the firm, Reuters reported.
But Vodafone, which spun off the firm last year and still retains an 81 per cent stake, is said to favour a merger with either Deutsche Telekom’s towers unit DFMG or Orange’s Totem, two separate sources said, cautioning no deal was imminent.
Boss Nick Read told reporters last month: “The next stage (for Vantage) should be an industrial merger, bringing our towers with another large player, a like-minded player, a like-minded operator.”
Read stressed his interest in exploring a combination with the infrastructure assets of either Orange or Deutsche Telekom.
Vodafone has come under sustained pressure from activist investor Cevian Capital for its flagging share price, with the investor pushing Vodafone to simplify its portfolio, enhance its strategy in key markets and boost returns.
A deal for Vantage would align the firm’s strategy with Cevian’s demands to look into strategic opportunities for its tower assets, and Read also indicated that he was gearing up for a period of dealmaking this year as he looks to turnaround the telecom giant’s fortunes.
Recent research found that Vodafone was the most shorted stock in Europe after a long period of underperformance on the markets.